HARRISONBURG, Va. (WHSV) — Your tax returns may be smaller this year. The IRS reported refunds are down about eight percent.
This is the first full year with the overhauled tax code, which means in 2018 tax withholding tables were lowered.
This is the first full year with the overhauled federal tax code, which means in 2018, tax withholding tables were lowered two to four percent. Lazaros Savides, the franchise owner of Liberty Tax Service in Harrisonburg, said that so far, filers have mostly received smaller amounts in their refund checks.
"We've seen a considerable amount of people with smaller refunds and we're the front line and we have to explain why," said Savides.
Since the withholding tables were lowered, it means that people are getting more money in their paychecks and less withheld in federal income tax.
"I always say it's psychological: how do you like to receive your money? Throughout the year or at the end of the year in one lump sum?" said Savides.
Savides said if you prefer to get a lump sum around tax season, then you could go to your Human Resources office and adjust your W4 to what it was prior to 2018 and your taxes would reflect that.
However, a report by the Government Accountability Office also found that about 30 million people, or 21 percent, will owe the IRS this money due to not withholding enough taxes in 2018.
The IRS last year released an updated version of its withholding calculator to help taxpayers figure out how much to have deducted from each paycheck.
Here are the new income tax brackets for married couples, listed by rate and taxable income bracket.
10% — 0 to $19,050
12% — $19,050 to $77,400
22% — $77,400 to $165,000
24% — $165,000 to $315,000
32% — $315,000 to $400,000
35% — $400,000 to $600,000
37% — $600,000 and up